Huawei has been dragged in the dirty tug-of-war that has been going on since some time between both the US and the Chinese governments. The Trump Administration has time and again introduced sanctions making it difficult for the Chinese company to work with American companies.
Continuing its clampdown on Huawei further, the U.S. Commerce Department introduced a new export rule mandating all the chipmaker companies, who plan to supply components to Huawei, to apply for an additional license thus controlling the crucial supply chain of the Chinese company.
This sanction means that Huawei cannot get its HiSilicon chipsets made by chip-making TSMC (Taiwan Semiconductor Manufacturing Company). For the uninitiated, TSMC is the world’s largest contract chipmaker that makes chipsets on contract for companies like Apple, Huawei, Qualcomm and MediaTek etc.
(Image credit: OnLeaks)No more HiSilicon SoCs on Huawei phones?
As per this report, TSMC will not be allowed to ship chipsets to Huawei after September 14 which leaves Huawei with only enough time to procure the new 5nm HiSilicon Kirin SoCs for its next flagship smartphone Mate 40.
Since it will be up to the U.S. Government to permit TSMC or any other company to supply components to the Chinese smartphone maker, it leaves Huawei in a fix as the company may not be able to source enough SoCs for the phones that are scheduled to launch in 2021. The company is scheduled to release phones like the P50 and Mate 50 series as well as all other phones for Huawei and its sub-brand Honor. Hence it may be forced to look for an alternate
In a bid to reduce its dependency on TSMC, Huawei has proactively started working with another Taiwanese company MediaTek that is known for making chipsets for budget and entry-level smartphones and has a capacity to produce 5G chipsets even for cheaper phones.
Some rumours suggest that Huawei may try to scout chipsets from TSMC indirectly using its newfound ally, MediaTek. However, there is always a fear that the Trump administration may come up with another ruling to tap this workaround.
Apart from MediaTek, Huawei is also said to be working with a relatively lesser-known company -SMIC. Despite being China’s biggest foundry, SMIC does not have the required technology to make advanced 5nm chipsets. It is still said to be struggling to come up with the 7nm and 8nm process due to the unavailability of required equipment.
Hence the only company left that is both capable and has the requisite technology ready to manufacture and supply flagship-grade SoC’s to Huawei is Qualcomm.
(Image credit: Gizmochina)Will Trump govt allow Qualcomm to supply chips to Huawei?
Like any other company, even Qualcomm will have to follow the licensing route to supply chipsets to Huawei, however, it is quite likely that the US-based chipmaker may get the nod to do so. Interestingly, even Qualcomm’s chipsets are manufactured by TSMC.
Allowing Qualcomm to supply chipsets to Huawei may have multiple benefits. Since Huawei is a huge company and despite all the clampdowns it still sells a lot of smartphones, partnering with it means a huge economical gain for any company.
Secondly, Qualcomm holds a major chunk of the chipset market and this deal could only strengthen its position against its competitor brands like MediaTek.
Lastly, working with Huawei may allow US companies to gain in terms of technology transfer as Huawei is still a global leader in terms of 5G technology. Even the Pentagon had once countered the Trump Administration’s decision to put additional blocks on Huawei by stating that the money received from selling components to Huawei could allow the US companies to invest in critical functions like R&D.
However, it will have to be seen if Huawei wants to work with a US company like Qualcomm since it has been trying to distance itself from American companies and wants to overcome these sanctions on its own conditions.